June 2, 2020 / 2:56 PM / 2 months ago

PRECIOUS-Gold slips 1% as Wall Street bets on economic restart

* China seeks to halt large U.S. soybean, pork purchases -sources

* S&P 500, Dow Jones indexes hit 3-month highs

* SPDR Gold ETF holdings scale 7-year high

* For an interactive graphic tracking the global coronavirus spread, open tmsnrt.rs/3aIRuz7 in an external browser (Updates prices)

By Asha Sistla

June 2 (Reuters) - Gold retreated 1% on Tuesday as investors booked profits and Wall Street rallied on optimism over economies emerging from coronavirus-led shutdowns.

Spot gold fell 0.7% to $1,727.23 per ounce by 2:54 p.m. ET, giving up some gains from earlier in the session. U.S. gold futures settled down 0.9% at $1,734.

“There is continuation of optimism in regards to the reopening of the economy, shown in the ongoing rally in equities... Under that premise, it’s easy to understand gold could be slightly vulnerable,” said David Meger, director of metals trading at High Ridge Futures.

U.S. equities rose as optimism around reopening businesses overshadowed fears of Sino-U.S. trade tensions and protests in the country.

However, gold’s overall trajectory is positive, analysts said, with the metal having gained over 18% after touching a near four-month low of $1,450.98 in March, mostly benefiting from economic uncertainties fuelled by the pandemic and a flurry of stimulus from global central banks.

On the U.S.-China front, two sources told Reuters China told state-owned firms to halt large-scale U.S. soybean and pork purchases, with one of them saying state purchases of U.S. corn and cotton have also been put on hold.

“If you see emotions heating up between U.S. and China over Hong Kong - that’s going to change the trade dynamic with Hong Kong. More people will gravitate towards gold,” said Michael Matousek, head trader at U.S. Global Investors.

Safe-haven bullion got further support after U.S. President Donald Trump vowed to use the military to halt widespread protests in U.S. cities over the death of a black man in police custody.

Meanwhile, holdings in the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust rose to 1,128.40 tonnes on Monday, the highest in seven years.

Elsewhere, palladium eased 0.2% to $1,956.74 per ounce, while platinum fell 0.5% to $843.27. Silver slipped 1.5% to $18.00 per ounce. (Reporting by Asha Sistla in Bengaluru; Editing by Marguerita Choy and Bernadette Baum)

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